Michael Bloomberg

After another dramatic week on Betfair’s US Election markets, punters holding long-term positions about Donald Trump and former NYC Mayor Michael Bloomberg have plenty to celebrate.

With voting for the Iowa Caucus just a week away, opinion polls and markets have flip-flopped in favour of Trump, at the expense of long-term favourite Ted Cruz. From being a 1.25 chance and rated 80% likely to win Iowa a fortnight ago, Cruz’s market estimate has fallen to 36% at odds of 2.8.

Trump is now heavily odds-on at 1.59 or 63%. The billionaire also continues to shorten in the main markets, down to 2.1 (48%) for the Republican Nomination and 5.5 (18%) for to be Next President.

If the betting markets are any guide, the race for the Presidency looks like a six-runner race. Five if, like me, you think Jeb Bush is a no-hoper. Three of those five would represent a seismic shock to U.S. politics, almost unimaginable until recently.

Significantly, the campaigns of the other, more predictable pair – Hillary Clinton and Marco Rubio – are troubled, if not quite in full-blown crisis mode just yet.

Clinton remains odds-on favourite, but the e-mail scandal is not going away and actually getting worse. Buoyed by polls in both Iowa and New Hampshire, Bernie Sanders is looking an ever increasing threat. His odds have halved since I recommended a bet last Friday.

Significantly, Joe Biden has intervened with comments on income inequality that were helpful towards Sanders. When Biden was considering a run, I felt he was the Democrats’ best bet. That ship has sailed but he still intends to play a part, and would make a very plausible running mate or Secretary of State for Sanders.

Nevertheless, he remains the outsider, which cannot be said anymore of Trump. Despite being written off by the commentariat, and by gamblers like me, for months, the controversial billionaire’s bandwagon shows no sign of stopping. At the time of writing, he is challenging Rubio for favouritism in the Republican Nominee market, for the first time.

Trump is now odds-on favourite to win the key New Hampshire primary. As I suggested last month, that race has become characterised by a brutal fight to be the establishment pick, to the effect that five candidates split that half of the vote, enabling Trump to win on 30%.

Rubio, who the market and establishment donors threw their weight behind early, is struggling to make the expected headway. Instead it seems John Kasich is reaping the rewards of focusing nearly all his efforts on the state, but seems less likely to win or challenge nationwide.

The third outsider is my main, long-term pick Ted Cruz. Like Sanders, he is a Congressman, but one that is detached from the mainsteam and untainted with the base. Under relentless attack as the front-runner in Iowa, Thursday’s Fox Business Network debate is a huge night for Cruz – the star of recent debates.

My instinct remains that the Cruz ground campaign can see off Trump in Iowa, building a head of steam going towards South Carolina and then Super Tuesday. However if Trump’s attacks on his eligibility for President or opposition to ethanol subsides pay off, Cruz’s highly effective campaign could also hit the buffers.

In this scenario, Trump becomes odds-on favourite to become the nominee, and the Democrat candidate, whoever that may be, becomes a near-certainty.

Let me throw in another couple of longshots at this point. If Trump pulls ahead, the likelihood of a contested convention becomes much more likely. I won’t pretend to be an expert regarding that complicated process, but among those that are, the name of Speaker Paul Ryan keeps cropping up, as the one man who could unite the party.

With that in mind, I’ve placed a small two unit bet on Paul Ryan to be the nominee at average odds of 400.0. If speculation heightens about a brokered convention, I could envisage these odds shortening well below 100.0, perhaps even down to 20.0.

Another rank outsider to keep an eye on is former New York Mayor Michael Bloomberg. It was reported at the weekend that Bloomberg has commissioned polling to test the waters for an Independent run. We don’t know the results of that polling, but in a ultra-polarised Trump v Sanders match-up, Bloomberg would have a convincing pitch as the ‘moderate’. I’ve not bet on Bloomberg yet and would want odds of 300+, but keep an eye out for rumours on this front.